TaxTMI 
TaxTMI 
2026 (9) TMI 223
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....t of manufacturing segment: 2. Based on the facts and in the circumstances of the case, the Learned AO/DRP has erred in law and in facts in making an adjustment of INR 24,90,00,000 with respect to the arm's length price ('ALP') of the international transactions under the manufacturing segment entered with its Associated Enterprises (AEs). 3. On the facts and circumstances of the case and in law, the Learned AO/DRP erred in not considering the benchmarking / economic analysis undertaken by the Appellant to justify the ALP in its transfer pricing documentation without recording any reasons to show that the conditions mentioned in clause (a) to (d) of Section 92C(3) of the Act were satisfied. 4. The Learned AO/DRP erred in rejecting the following companies as comparables which were selected by the Appellant as comparables in its transfer pricing documentation for the FY 2019-20, on the ground that the companies are not functionally comparable to the business of the Appellant - Kirloskar Corrocoat Private Limited Shalimar Paints Limited 5. The Learned AO / DRP erred in considering the following non-comparable companies a....
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....Travel and Conveyance expenses, amounting to a disallowance of Rs. 1,05,17,886. 12.2. Erred in law and on facts stating that the expenses are not incurred fully and exclusively for the purpose of business. 10% Ad hoc disallowance on Advertisement and Sales promotion expenses 13. The learned AO/DRP- 13.1. Erred on facts by stating that the evidence is incomplete as the invoices does not tie-up on a one-to-one basis with the Bank statement. 13.2. Erred in law making an ad hoc 10% disallowance of Advertisement and Sales promotion expenses, amounting to a disallowance of Rs. 3,08,51,942. 13.3. Erred in law and on facts stating that the expenses are not incurred fully and exclusively for the purpose of business. 10% Ad hoc disallowance on Miscellaneous promotion expenses 14. The learned AO/DRP- 14.1. Erred on facts by stating that the evidence is incomplete as the invoices does not tie-up on a one-to-one basis with the Bank statement. 14.2. Erred in law making an ad hoc 10% disallowance of Miscellaneous promotion expenses, amounting to a disallowance of Rs. 1,71,19,731. 14.3. Erred in law ....
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....vendors has been provided by the assessee but was not accompanied with further documentary evidence like receipts/vouchers, bank statements etc. Therefore, the AO has made a disallowance of 10% of Rs. 10,51,78,860/-. During the course of assessment, the assessee had provided a party-wise break-up of expenditure and sample invoices for parties having higher amounts, also the bank statements are provided on sample basis. It is submitted that there was no cash expenditure incurred by the company and all payments are made via banking channels. 4. On this aspect, the issue was raised before Ld. DRP - 2, Mumbai who had dismissed the contentions of the assessee, as the assessee before the DRP also had produced part details along with bank statements. The details furnished before the Panel was for Rs. 76,25,658/- only which in the opinion of DRP was only a fraction of the expenses claimed, therefore, the disallowance made by the AO was found in order. 5. The assessee before us through the Ld. AR had submitted that the assessee has furnished sample invoices and bank entries to establish the genuineness of expenditure, however, the AO as well as DRP are not convinced with the submissio....
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.... 2024 for AY 2015-16,wherein it is held by the Tribunal that claim of assessee is contrary to the provisions of section 36(1)(vii) of the Act, as the case of assessee is not covered by the decision of Vijaya Bank Vs. CIT (2010) 323 ITR 166 (SC) which is a banking company. Therefore, the claim of assessee has been disallowed by the lower authorities. 10. Ld. AR on the aforesaid issue had referred to the subsequent order of ITAT in the case of Asian Paints Limited vs. DCIT vide ITA No. 2700/Mum/2023, order dated 27th July, 2024 for AY 2016-17, wherein the tribunal has discussed the aforesaid issue at length including the decision for AY 2015-16 also and held that the decision of Vijay Bank (Supra),itself had observes that section 36(1)(vii) applies both for banking and non-banking business. It is further noted by the Tribunal that as per the principle laid down by Hon'ble Bombay High Court, which is followed by Hon'ble Karnataka High Court and Hon'ble Gujarat High Court, wherein post-amendment to section 115JB also provision for doubtful debts has been allowed as deduction from book profits. Therefore, the provision for doubtful debt is deductible not only under normal provisions ....
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....ement of income of assessee referred to an intimation u/s. 143(1) by the AO, while recomputing the assessed income of assessee. The AO has not mentioned any date of intimation u/s. 143(1) in the table of variation, wherein he had adopted the income as per return of income at Rs. 118,81,42,290/- and income as per intimation u/s. 143(1) at Rs. 1,22,89,65,030/-. Further, as per submission of Ld. AR and facts on record no intimation u/s. 143(1) is reflecting in assessee's account on the Income Tax Portal, which the assessee has the lawful right to be intimated with, as it has to defend or explain,before the Revenue makes any disallowance or addition to its income. We are, therefore setting aside this issue also to the file of AO to provide the assessee with the copy of intimation and to take on record the submission of assessee regarding such disallowance of additions made by the CPC for which the assessee has no information as of today. The matter, therefore, is set aside to the file of AO for verification and adjudication afresh. 14. Needless to say, the assessee shall be provided with reasonable opportunities of being heard in the set-aside proceedings. The assessee is also direc....